Antidumping and Strategic Industrial Policy: Tit-for-Tat Trade Remedies and theChina–X-Ray EquipmentDispute

Abstract

This article examines the relationship between antidumping duties and strategic industrial policy. We argue that the dynamic between the two instruments is more complex and elaborate than that offered by the conventional account. We use the recent China-X-Ray Equipment dispute as a case study to show that linkage between the two instruments may not be the consequence of a government-led policy but instead a result of firm-driven responses to an industrial policy. This in turn may lead to antidumping tit-for-tat behavior between WTO members. We also analyze how WTO litigation serves as a means to alter the payoff and discuss the implications and unresolved questions that remain following the China-X-Ray Equipment ruling by the WTO. * 2 The WTO Dispute Settlement Body does not formally have any power to review domestic administrative rulings. However, it can review the legality of such rulings with a WTO member's WTO treaty commitments. If it finds the domestic administrative rulings to be inconsistent and the WTO member does not alter its ruling to conform to WTO rules, then the complainant in the WTO dispute is entitled to seek compensation or enact countermeasures pursuant to the WTO Dispute Settlement Understanding.3 The academic literature has focused on the role of tariffs in strategic trade and industrial policies but not antidumping duties as the particular tool. To the extent that scholars have focused on the use of antidumping measures in conjunction with industrial policy, the attention has been primarily on strategic use of antidumping by governments and not firms.

China - HP-SSST: Last Part of Growing Pains?

“…Still the European Union and Japan did not raise any issue relating to the definition of product and industry, while the issue of industry was raised in the dispute China -X-Ray Equipment. As a matter of fact, Moore and Wu (2015) summarize one of the EU's allegations in this case as whether the Chinese authority had "appropriately defin[ed] the boundaries of the product scope of the investigated sector when undertaking its price effects analysis and its analysis of the state of the domestic industry". 35 Still, even in the China -XRay Equipment case the European Union did not challenge the product definition although it noted that "there is a wide and recognizable gap between high-and lo-energy scanners" which leads to "very large disparities in price", 36 just like in the present case.…”

“…35 Still, even in the China -XRay Equipment case the European Union did not challenge the product definition although it noted that "there is a wide and recognizable gap between high-and lo-energy scanners" which leads to "very large disparities in price", 36 just like in the present case. Moore and Wu (2015) suggest that this may be due to the lesson the European Union learned from the EUFootwear case brought by China against the European Union. In that case, the Panel left ample margins of maneuvering for the investigating authorities to determine 'like' products.…”

“…In that case, the Panel left ample margins of maneuvering for the investigating authorities to determine 'like' products. As Moore and Wu (2015) speculated regarding the HP-SSST case, ongoing at the time, this issue "will be a recurrent theme in future WTO disputes" (page 284).…”

“…2 China -Anti-dumping Measures on Imports of Cellulose Pulp from Canada, Request for Consultations (DS483), WT/DS483/1. 3 Interested readers are referred to the prev ious articles that have discussed these final ru lings: see Vermulst (2014, 2015), Moore and Wu (2015), and Mitchell and Prusa (2016). stability, anti-steam oxidation and corrosion resistance at high temperature.…”

“…Time will tell. Vermu lst (2014, 2015), Moore and Wu (2015), and Mitchell and Prusa (2016). 14 Table 3 shows seven disputes in total but notice that the first one did not lead to the establishment of a Panel.…”